Minneapolis Fed President Neel Kashkari made comments that’s validated many of yesterday’s remarks stating hedge funds and “other investment vehicles” are the primary reasons for the illiquidity in the repo market. Kashkari further opined one of the greatest risks is
Yesterday I commented about the massive outperformance of technology which started in earnest in 2016. According to Bloomberg the ten years of tech outperformance is the longest stretch in history with concentrations exceeding the manic 2000 apex.
Fourth quarter earnings season is about to commence. According to Goldman, results are expected to increase by the smallest amount in three years, commenting further margin pressure may continue for the foreseeable future for a myriad of reasons.
December’s jobs data was nominally disappointing. In my view the biggest disappointment was wage growth which fell below 3% for the first time since July 2018. Based upon the Phillips Curve, wages should be rising with low unemployment.
Indexing the last five years has been a runaway success but has this success created market imbalances? Many are starting to opine valuations of the mega sized technology issues have created an environment conducive to increased volatility.
Did Iran back down? Did brinkmanship win again? Only history will answer this question.
Perhaps the only certainty to write is the media/blogosphere is filled with official sounding but completely unsubstantiated reports.